Published October 16, 2008
Downturn hits SIA passenger numbers in Sept
By VEN SREENIVASAN

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IT'S a sign of the times when one of the world's most profitable carrier suffers a fall in passenger numbers for the first time in three years.
Singapore Airlines said yesterday that passenger numbers in raw terms dipped 1.6 per cent to 1.51 million in September from a year ago.
However, there was a 1.3 per cent growth in systemwide passenger carriage (measured in revenue passenger kilometres), largely due to good loads on its 'kangaroo route' - London-Singapore-Sydney.
But with capacity (measured in available seat kilometres) up by 6.8 per cent during the month, the passenger load factor declined 4.1 percentage points to 76.9 per cent in September.
Meanwhile, a 7.3 per cent drop in cargo traffic, against a 4.2 per cent reduction in capacity, translated to a 2.1 percentage points decline in cargo load factor to 61.1 per cent.
As a result, overall load factor fell to 67.4 per cent - one of the lowest levels in recent years.
But it's the passenger side which is of concern, say analysts.
All route regions recorded declines in passenger load factor as new capacity introductions were not matched by a commensurate increase in passenger traffic.
The airline attributed this to softening demand caused by weakening global economic conditions.
'Uplifts for the East Asia route region have additionally been affected by the political unrest in Thailand and the stringent visa restrictions for travel to China imposed for the Beijing Olympic Games (although the visa restrictions have been lifted for most of the affected countries from mid-September),' it said in a statement.
'Ramadhan, occurring earlier in the month of September this year, contributed to the decline in travel to and from countries in the West Asia and Africa region.'
The airline's head of communications Stephen Forshaw said SIA would plan its capacity deployment carefully in light of the changing economic conditions globally.
'We will watch for changes in demand across routes carefully and manage capacity flows, and look at some changes of schedules on routes that have multiple daily frequencies to ensure capacity best matches demand,' he said.
Amongst the services likely to be looked at are the long-haul routes to the US, given the rapidly weakening US economy.
BT understands that the airline may be replacing its 375-seater B747-400s on the Singapore-Hong Kong- San Francisco route with the 275-seater B777- 300ER.
The airline is also likely to be watching closely its loads on its daily services to Los Angeles and New York, especially its recently introduced all-business class A340-500 services. It also recently started a service to Houston, Texas, which could come under capacity review as well.
SIA gets about half its income from premium seats. But with global economic conditions rapidly deteriorating, and forcing sharp cutbacks in travel budgets, it remains to be seen how badly the airline could be hit.
SIA's share price has already plunged 29 per cent this year, closing at $12.32 yesterday.